Smaller players could be routed; major Indian brands may not get any significant advantage
Latest news : The Union government is mulling imposing a 15 per cent basic customs duty (BCD) on the import of finished mobile handsets once the Goods and Services Tax (GST) comes into effect.
The move is intended to protect manufacturers who have set up units in India and put a curb on the outflow of foreign exchange to countries like China, Taiwan, and Vietnam.
Boosting local manufacturing or assembly of mobile phones is a key part of Prime Minister Narendra Modi’s pet project — Make in India.
What the government intends to do?
The Commerce and Industry Ministry had proposed a customs duty of 15 per cent on smartphone imports. Under the Phased Manufacturing Program (PMP) developed by the ministry of electronics and information technology, the government aims to enable large-scale manufacturing of mobile phones. As local value addition in handsets remains as low as two per cent at present, sub-parts such as mechanics, microphones, receivers, keypads, and USB cables, among others, have been targeted in the initial stage.